In order to save costs and adjust the company structure, German big group company Siemens announced in Munich on June 18 that it plans to reduce 2,700 people worldwide in the oil, gas and power groups in the next few years. The number of layoffs is about 4% of the business group's 64,000 employees worldwide. The layoffs will last for several years, mainly involving engineering, procurement and construction projects as well as transmission products.
Previously, on May 7, Siemens announced the spin-off of the oil, gas and power group with more than 150 years of history. Siemens will cut 10,400 people worldwide, saving 2.2 billion euros in costs.
The oil, gas and power group is Siemens' largest business unit, but in recent years the group's performance has encountered difficulties. Many people attempts to adjust the production structure have been fruitless, and Siemens hopes to save 2.2 billion euros in costs with the “10,000-person layoffs” program.
Avoiding GE's old road
GE, another big group company alongside Siemens, has not been good for the past two years. In the past two years, GE has fired two CEOs, cut dividends twice and cut down on $23 billion in assets.
As a world-class multinational industrial giant, GE defined the "American era," and it still stands still after the end of this era. However, GE has skilfully escaped the impact of the Great Depression, World Wars, and commercial globalization. In the past two or three years, it has experienced the most serious decline in its history in 125 years.
At the time when the Fortune 500 list was released in 2019, GE became the most loss-making company, mainly due to the drag of the power business, with a loss of $22.355 billion.
In fact, GE is working hard to reverse the decline. GE's current business layout shows that after selling smart platforms, distributed generation, industrial gas engines and other businesses in the past two years, GE's current business is mainly focused on digital, medical, aviation, power generation, renewable energy, and petroleum. Nine major sectors of natural gas, energy interconnection, transportation and finance. Among them, the digital sector, as one of the main directions of GE's future development, has received great attention from the company. In the near term, GE invested $1.2 billion to set up an industrial IoT software company to overweight the expansion of the digital segment business.
Therefore, Siemens decided to take the initiative to avoid the fate of GE's previous losses.